Selective entry and auction design

Andrew Sweeting*, Vivek Bhattacharya

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Scopus citations

Abstract

This article examines how different auction designs perform when entry is endogenous and selective, by which we mean that bidders with higher values are more likely to enter. In a model where potential bidders are symmetric, we show that three alternative designs can significantly outperform the 'standard auction with simultaneous and free entry' when entry is selective. When bidders are asymmetric, we show that level of bid preference that maximizes a seller's revenues is significantly affected by the degree of selection. We also describe recent empirical and econometric work that shows that the degree of selection can be identified and estimated using standard types of auction data.

Original languageEnglish (US)
Pages (from-to)189-207
Number of pages19
JournalInternational Journal of Industrial Organization
Volume43
DOIs
StatePublished - Nov 1 2015

Keywords

  • Auctions
  • Bid preferences
  • Market entry
  • Selection

ASJC Scopus subject areas

  • Industrial relations
  • Strategy and Management

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